City of Hercules
Hercules, California
Independent Accountants Report on
Applying Agreed-Upon Procedures to
Appropriations Limit Schedule
For the Year Ending June 30, 2025
INDEPENDENT ACCOUNTANTS REPORT ON
APPLYING AGREED-UPON PROCEDURES
To the Honorable Mayor and Members of City Council
of the City of Hercules
Hercules, California
We have performed the procedures enumerated below on the accompanying Appropriations Limit Schedule of the City of Hercules, California (the City) for the year ending June 30, 2025. The Citys management is responsible for the Appropriations Limit Schedule.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of meeting the requirements of Section 1.5 of Article XIII-B of the California Constitution, which was agreed by the City and the League of California Cities (as presented in the publication entitled Agreed-upon Procedures Applied to the Appropriations Limitation Prescribed by Article XIII-B of the California Constitution). This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures performed and associated findings are as follows:
1. We obtained the completed worksheets used by the City to calculate its appropriations limit for the year ended June 30, 2025, and determined that the limit and annual calculation factors were adopted by resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council.
Findings: No exceptions were noted as a result of our procedures.
2. For the accompanying Appropriations Limit Schedule, we added the prior years limit to the total adjustments, and agreed the resulting amount to the current years limit.
Findings: No exceptions were noted as a result of our procedures. However, we noted that the City is not maximizing its calculation by using the City population factor for the year ended June 30, 2025 that will benefit the City the most. There is no impact as the Citys appropriations for 2024-25 are below the limit.
3. We verified the current year information presented in the accompanying Appropriations Limit Schedule to corresponding information in worksheets used by the City.
Findings: No exceptions were noted as a result of our procedures.
4. We verified the appropriations limit presented in the accompanying Appropriations Limit Schedule to the appropriations limit adopted by the City Council.
Findings: No exceptions were noted as a result of our procedures.
To the Honorable Mayor and Members of City Council
of the City of Hercules
Hercules, California
2 We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respective on the accompanying Appropriation Limit Schedule. Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of the City Council and management of the City and is not intended to be and should not be used by anyone other than these specified parties.
Santa Ana, California
December 19, 2024
City of Hercules
Appropriations Limit Schedule
For the Year Ending June 30, 2025
See accompanying Notes to Appropriations Limit Schedule. 3 Amount SourceA. Appropriations Limit FY 2023-2024 536,017,008$ Prior year appropriationlimit adopted by the CityB. Calculation Factors:1) Population increase % 0.9947 California Department of Finance2) Inflation increase % 1.0362 California Department of Finance3) Total adjustment % 1.0307 (B1 x B2)C. Annual Adjustment Increase 16,460,085 {(B3-1) x A}D. Other Adjustments:1) Loss responsibility (-) - N/A2) Transfer to private (-) - N/A3) Transfer to fees (-) - N/A4) Assumed responsibility (+) - N/AE. Total Adjustments 16,460,085 (C+D)F. Appropriations Limit FY 2024-2025 552,477,093$ (A+E)
City of Hercules
Notes to Appropriations Limit Schedule
For the Year Ending June 30, 2025
4 Note 1 Purpose of Limited Procedures Review
Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), California governmental agencies are restricted as to the amount of annual appropriations from proceeds of taxes. Effective for years beginning on or after July 1, 1990, under Section 1.5 of Article XIIIB, the annual calculation of the appropriations limit is subject to the agreed-upon procedures in connection with the annual audit.
Note 2 Method of Calculation
Under Section 10.5 of Article XIIIB, for fiscal years beginning on or after July 1, 1990, the appropriations limit is required to be calculated based on the limit for the fiscal year 1986-87, adjusted for the inflation and population factors discussed in Notes 3 and 4 below.
Note 3 Population Factors
A California governmental agency may use as its population factor either the annual percentage change of the jurisdictions own population or the annual percentage change in population of the county where the jurisdiction is located. The factor adopted by the City of Hercules, California (the City) for the year ending June 30, 2025, represents the annual percentage change in population for the City.
Note 4 Inflation factors
A California governmental agency may use as its inflation factor either the annual percentage change in the 4th quarter per capita personal income (which percentage is supplied by the California Department of Finance) or the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction.
The factor adopted by the City for the year ending June 30, 2025, represents the percentage change in the local assessment roll from the preceding year due to the change of local nonresidential construction.
Note 5 Other Adjustments
A California government agency may be required to adjust its appropriations limit when certain events occur, such as the transfer of responsibility for municipal services to, or from, another government agency or private entity. The City had no such adjustments for the year ending June 30, 2025.